management of various companies are able to review their cash budget with the aid of fund flow statements
Helps in the evaluation of alternative finance and investments plan
Investors are able to measure as to how the company has utilized the funds supplied by them and its financial strengths with the aid of funds statements.
It serves as an effective tool to the management of economic analysis
It explains the relationship between the changes in the working capital and net profits.
Help in the planning process of a company
It is an effective tool in the allocation of resources
Helps provide explicit answers to the questions regarding liquid and solvency position of the company, distribution of dividend and whether the working capital is effectively used or not.
Helps the management of companies to forecast in advance the requirements of additional capital and plan its capital issue accordingly.
Helps in determining how the profits of a company have been invested: whether invested in fixed assets or in inventories or ploughed back.
